$120MM CLAIM FILED AGAINST MUSKEGO, OFFICIALS

Special to the Readers of Milwaukeeworld.com

By Michael Horne

And The Milwaukee World Hound Dog Team

What is it about Muskego that makes city politics there such a contact sport?

• In June, 2008, a recall election was threatened by residents opposed to the construction of a Wal-Mart supercenter in the fast growing community of 22,839 at the southeast corner of Waukesha County. Although the recall did not take place, (the recall group is waiting for the requisite one year of any new term to elapse in order to begin collecting recall signatures again) the debate took on a personal aspect with charges and counter-charges. Mayor John Johnson, who got into office himself in a 2006 recall election, supported the project which began construction last fall.
  
• Johnson was also in favor of another development proposal now being investigated by Waukesha District Attorney Brad D. Schimel [UW '90]. Schimel confirmed last week he would investigate a complaint that two members of the city's Community Development Authority, Frank Waltz and Keith Werner, had a conflict of interest when they voted to allow a sale and rezoning transferring property owned by their church to a neighboring tavern. Their former co-parishoner and departing alderman, Dan Pavelko, made that complaint.
  
• Now, the first week of January 2009 finds the city in receipt of a $120 million Notice of Injury - Notice of Claim filed by another developer alleging an "ongoing conspiracy to thwart or prevent" development of the 10-acre formerParkland Mall, located at S74 W17000 Janesville Road dating to as early as November, 1998.
  

The saga pits current Mayor Johnson, a former chief of police who ousted former Mayor Charles Damaske in the November 2006 recall, against property owner Art Dyer and his associates.
The 100-page complaint includes numerous affidavits, from former aldermen, a building inspector, and a current Community Development Authority [CDA] commissioner. The complaint also includes an affidavit from Damaske who said he favored a plan presented to him while mayor that called for a $16 million Tax Incremental Financing District #10 for Dyer's Parkland Venture's proposed $50 million Beacon Square Development at the site of the former mall.
Dyer's real estate is a "cornerstone" a "catalyst" and "absolutely vital" to creating an "attractive, pedestrian-friendly downtown," Damaske wrote in a 2006 letter, shortly before his recall.
However, upon taking office after ousting Damaske, the administration of Mayor Johnson made significant changes to the TIF agreement markedly affecting the ability of the deal to go through, according to the complaint.
Why? According to the complaint, "the city's primary purpose was to buy back the property for below market value."
Dyer, thwarted in his attempt to develop the property, and seeking to reduce expenses and increase revenue, turned it into a Christmas tree farm, qualifying for a lower tax rate as an agricultural property.
The City of Muskego ignored an order from Waukesha Circuit Court Judge Michael O. Bohren [Marquette U '75] issued on December 3, 2007 and continued to tax it at the higher commercial property rate notwithstanding, overcharging Dyer more than $67,000, which resulted in Waukesha County filing a tax lien against the property. [Of that amount, some $27,504 was refunded last week the day after the complaint was filed, utilizing Muskego-Norway School District funds that the City of Muskego had in its account.]
Even though the Waukesha County Treasurer offered to waive penalties and interest if the City paid the amount that resulted from its overassessment of the property by September 30, 2008, the City did not comply. As a result, district taxpayers will have to pay an additional $18,000 in penalties and interest that could have been avoided and waived.
Last February, after prior approvals by both the City of Muskego Mayor's Task Force and Plan Commission, the Muskego Common Council approved construction of a 6 foot high brick wall along the property's border on Janesville Road, preventing access to and from the parcel owned by Parkland Venture. It is one of the more ambitious municipal wall projects since those of East Berlin during the cold war.
As recently as November, 2008, Mayor Johnson contacted Dyer's lender about the property, telling the lender that the property was only worth $3.9 million dollars so the city could purchase it at a below market rate. The lender, concerned by the Mayor's call, ordered a new appraisal on the property. The appraisal was completed on November 21, 2008 and estimated the current value of the property in the amount of $8,200,000.
Eight owners of property south of the Muskego Sanitary Landfill, including Dyer, are also involved in one of the longest running court cases in the area, an action filed in 2001 by Dyer et al, against Waste Management, Inc. alleging groundwater contamination from a nearby closed landfill. That case is scheduled for a two-month jury trial beginning May 12th, 2009.
Dyer and his neighbors received a Christmas gift on December 24th, 2008 when the United States Environmental Protection Agency [EPA] confirmed by letter [pdf] that “EPA does have an estimate of the areas where the Preventive Action Limits [PAL] have been exceeded for substances associated with releases from the landfill and associated operations. The specific properties that you inquired (about) sic, are in that area and thus are considered part of the Muskego Sanitary Landfill Superfund Site.” By this letter, the EPA confirmed the claims Dyer et al, have been making for years which have been denied not only by Waste Management, Inc. but also by the City of Muskego. This should be extremely troublesome for the City of Muskego as the EPA previously found it to be a Potentially Responsible Party [PRP] owner/operator of the Muskego Sanitary Landfill Superfund Site. And they say New York City real estate is not for the faint-of-heart!